Mobileye Global, Inc. Q4 FY2024 earnings call

• Q4 results aligned with expectations; EyeQ volume better than anticipated. - Took a conservative guidance approach due to uncertainties in Chinese OEM volumes, SuperVision demand, and risks related to Zeekr and Polestar. - Won new ADAS business, including a multimillion-unit RAM data harvesting program. - Highlighted technological advancements in silicon design efficiency and AI, with upcoming benchmarks on EyeQ performance. - Progress in commercial and new business, with upcoming launches and detailed AI stack advancements discussed.

In Q4, EyeQ volume was up 9% versus Q3, largely due to higher-than-expected volume from Chinese domestic OEMs. Operating margin in Q4 was 21%, almost 5 points higher than Q3. Operating cash flow in 2024 was $400 million, flat compared to 2023 despite significant year-over-year revenue and earnings declines. Revenue contribution from EyeQ was driven by Chinese OEM orders, and operating expenses were aligned with initial reviews.

2025 revenue guidance midpoint is $1.75 billion with adjusted operating income of $217 million, representing ~6% year-over-year revenue growth and over 10% growth in adjusted operating income. EyeQ volume expected in range of 33 million units. SuperVision volumes at midpoint in low 20,000-unit range. Q1 2025 revenue expected to be 25% of full-year guidance midpoint, gross margin higher than Q4, adjusted operating expenses at or slightly below $250 million per quarter. Anticipate operating cash flow above adjusted net income in 2025.

• Uncertainty in visibility of Chinese OEM volumes. - Risk that Zeekr could choose in-house system for Zeekr009. - Polestar volume stability risk due to potential geographic expansion plans. - Delays in OEM decisions regarding advanced automation adoption timelines.

Q: At a high level, what timelines are legacy automakers considering for advanced automation adoption?

A: Amnon Shashua states 2027 seems the sweet spot, with progress in 2025 bearing fruit, and all activities in 2024 expected to bear fruit in 2025 for supervision and surround ADA.

Q: How do you think about gross margins for 2025?

A: Moran Shemesh says gross margin expected to increase by 1.5% primarily due to SuperVision being lower volume than 2024.

Q: What are the risks in losing OEM programs in terms of timing, OEMs taking no action, or in-house solutions?

A: Amnon Shashua says third bucket of in-house development not a major trend, mostly related to first two buckets of timing and OEMs taking no action due to powertrain delays.

Q: Do price considerations impede OEM decisions?

A: Amnon Shashua states price is a consideration but not an impediment, and they work with customers to find right solutions. Nimrod Nehushtan adds no lost programs due to price currently.

Q: How does Mobileye view adjacent market opportunities like humanoids and drones?

A: Amnon Shashua says studying synergies but in early stages, not in mature decision phase yet.

Q: Update on Mobileye drive technology progress and SuperVision/RFQ pipeline?

A: Amnon Shashua says Mobileye drive technology progressing, milestones in 2025 including closed user group testing, and Nimrod Nehushtan states no negative changes in RFQ pipeline opportunities.

Q: Thoughts on Tesla's FSD version 13.2?

A: Dan Galves says Mobileye's ITV platform will greatly exceed FSD version 13, focusing on high precision for eyes-off driving.

Q: Feedback on DXP framework from OEM engagements?

A: Prof. Amnon Shashua states DXP framework is in full use in SuperVision development with OEMs.